Catherine Is a CPA Employed by a Large Accounting Firm

question 30

Multiple Choice

Catherine is a CPA employed by a large accounting firm in San Francisco. In 2014, she paid the following amounts: How much may she deduct on Schedule A as a miscellaneous deduction, before considering the 2 percent of adjusted gross income limitation?

• A)$275
• B)$345
• C)$775
• D)$975
• E)None of the above

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Definitions:

Direct Labor Cost

The total cost of employment for employees who directly contribute to the production of goods or services, including wages and benefits.

Machine-Hours

A measure of the total time that machines are operating in a manufacturing process.

Predetermined Overhead Rate

The predetermined overhead rate is calculated by dividing estimated overhead costs by an allocation base, such as direct labor hours, to allocate overhead costs to products or services.

Manufacturing Overhead

All indirect costs related to the production process, such as the costs of maintenance, supplies, and utilities, excluding direct materials and direct labor.